Mexican president expects big IMF firewall boost
Los Cabos, Mexico • G20 summit host President Felipe Calderon of Mexico said Saturday that he expects the world's largest economies to deliver more than the $430 billion pledged to stop the spread of the European financial crisis.
Calderon told a small group of reporters that he expects "there to be capitalization that's bigger" than the amount fund members promised in April. He called International Monetary Fund recapitalization one of the key tests of the success of the summit.
The Mexican president said Saturday that he doesn't expect the United States to contribute to the recapitalization, something that he said showed the importance of emerging economies. The money would be used to bail out countries and key industries unable to borrow money on the open market due to fears the crisis will leave them unable to repay.
"I expect there to be a very important agreement on the IMF," he said. "It will have a transcendental importance for many reasons, primarily because it will probably be the most important capitalization agreement that the fund has had in its history.
"Secondly, it will be the first time that the fund is capitalized without the United States," he said. "On this occasion the leadership of the United States wasn't necessary."
Group of 20 leaders are gathering for a two-day summit starting Monday that will be dominated by the crisis in Europe.
As other leaders have, Calderon played down expectations that the summit will be able to address the result of Sunday's national elections in Greece, which could bring to power a party that rejects the terms of an international bailout of the country. That could set off a chain events leading to Greece's effective exit from the shared Euro currency and the spread of economically devastating fears about the viability of other European countries and industries.
He said the ramifications of the elections would probably not become fully clear during the summit, and described the meeting's goal as finding long-term solutions rather than reassuring immediate market fears.
"In any case, I think our efforts in the G20, and the efforts of other European countries, are to construct scenarios in which the economic future of Europe isn't dependent on the Greek case," he said. "This implies more rapid progress in the construction of a truly integrated European union."
He cautioned against expected concrete steps in that direction to emerge from the G20.